Mexico's PAN announces "cutting-edge" energy overhaul proposal

Mexico's conservative opposition National Action Party, or PAN, said it had come up with an "extraordinarily cutting-edge" energy-sector overhaul plan, although it refrained from providing any details on the proposal for the time being.

PAN chairman Gustavo Madero made the announcement Wednesday at a press conference in the central state of Aguascalientes amid controversy surrounding the future of state-owned oil monopoly Petroleos Mexicanos.

The PAN has prepared "an extraordinarily cutting-edge proposal on the energy-reform issue," Madero said, denying that his party had any interest in privatizing Pemex but stressing that the company must undergo a "modernization" process.

In recent hours, leaders of Mexico's left slammed remarks made by President Enrique Peña Nieto in London, saying they revealed the government's intention to privatize the country's hydrocarbon resources.

Peña Nieto, in an interview in the British capital on Monday, insisted on the need to modernize Pemex and ensure the private sector's participation in Mexico's oil industry, though he stressed that the state would maintain ownership of hydrocarbon reserves.

Madero noted that in the Pact for Mexico, signed on Dec. 2, 2012, by Peña Nieto's administration and opposition parties to promote structural overhauls in key areas, the PAN had pledged to "present more far-reaching and reform-minded initiatives and reforms."

He said no details on the energy proposal would be provided until it is formally unveiled, while also criticizing leftists for trying to nip any energy overhaul plan in the bud by raising alarm bells about a supposed hidden agenda to privatize Pemex.

When asked if the PAN's reform proposal may lead to the Mexican energy sector being opened up to private investment, Madero said only "We'll see."

Pemex, the world's fifth-leading oil producer, has a monopoly on the production of hydrocarbons (crude and natural gas) and refined products in Mexico.

A recent oil sector overhaul, however, gave the oil monopoly - created when the country's oil industry was nationalized in 1938 - more freedom to undertake projects with private firms, which are hired under incentive-based service contracts.

Though production has recently stabilized and the country said last year it had achieved a reserve-replacement ratio of 100 percent, Mexico's output has suffered from the natural decline of the once-super giant Cantarell offshore field and a lack of sufficient investment.

In addition to exploring deep-water areas in the Gulf of Mexico, Pemex also is looking to boost energy production by assessing its non-conventional reserves. EFE